Wednesday’s market was virtually a repeat of the one Tuesday, with little or no price movement at the great majority of points and the few increases or decreases being capped at about a nickel. Lingering cold in the Midwest and Northeast was being joined by a modest amount of cooling load developing from Texas through the desert Southwest into California.

A major run-up in energy futures made one source hesitant to predict Thursday’s price direction. His gut feeling was that numbers should be dropping because of warming trends predicted for Friday or Saturday in the key northern market areas and expectations of a small storage withdrawal report, but he said Wednesday’s near-record heights in crude oil and gasoline futures might lend psychological support to the cash gas market.

The natural gas screen saw only a small gain of 3.4 cents, and an analyst said he would have expected it to soften without the uplifting influence of the petroleum-based contracts at Nymex. Crude oil soared to $38.18/bbl, its highest level since September 1990, prior to the first Persian Gulf war, and unleaded gasoline at New York Harbor settled close to its all-time high. Heating oil also moved up sharply. A government report Wednesday morning of a decline in gasoline inventories and a huge lethal bombing in Baghdad, Iraq continued to stoke oil traders’ fears of coming tightness in global supplies.

The West was a mixture of conflicting influences. PG&E’s issuance of a high-linepack OFO (see Transportation Notes) and Northwest’s bulletin board advisory that warmer temperatures in its service area had caused excessive banking of gas on its system were added to previous notes about higher than desired linepack by other pipelines in the region (see Daily GPI, March 17). But what The Weather Channel called “an unusually strong Pacific cold front” was due to move into the Pacific Northwest Thursday, bringing with it major snowfalls in mountainous areas. At the same time, date-specific record high temperatures are likely in parts of the Southwest, further aggravating the area’s drought problems and likely contributing to a reduction in available hydropower down the road.

A marketer said traders were worried that SoCalGas would emulate PG&E and also call an OFO, but it didn’t. With so many pipelines in the West complaining about high linepack, she found it hard to understand why regional prices weren’t falling. “I guess it must be warm enough in the Southwest to get some air conditioning load going,” she said.

The marketer quoted her Waha purchases in the mid $5.00s but said later numbers were a little higher because of the firming screen.

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